Slide 1: Barclays PLC Q2 2019 Results
Barclays PLC Q2 2019 Results 1 August 2019
Slide 2: Jes Staley, Barclays Group Chief Executive
Jes Staley Barclays Group Chief Executive
Slide 3: Q219 highlights
Q219 highlights Another clean quarter of performance with increased return of capital to shareholders Delivered £1.1bn of attributable profit and RoTE Returns1 of 9.3% for Q219 Cost Management priority to manage costs below £13.6bn2 control to reflect the income environment Reported CET1 ratio incre
Slide 4: Tushar Morzaria, Barclays Group Finance Director
Tushar Morzaria Barclays Group Finance Director
Slide 5: H119 Group highlights
H119 Group highlights Group RoTE of 9.4% with a half year dividend of 3p Financial performance1 RoTE1 Income • Generated 12.6p of EPS, excluding L&C Q1 Q2 H1 £10.8bn H118: £10.9bn (statutory EPS of 12.1p) Costs • Increased half year dividend of 3p declared Group3 9.6% 9.3% 9.4% £6.8bn H118: £6.7bn •
Slide 6: Q219 Group highlights
Q219 Group highlights Generated £1.1bn of attributable profit and 40bps of reported CET1 ratio accretion Financial performance1 Income • Income decreased 1%, reflecting the challenging income environment £5.5bn Q218: £5.6bn Costs • Q219 costs of £3.5bn demonstrated continued cost discipline, while i
Slide 7: Q219 Barclays UK
Q219 Barclays UK Robust RoTE of 13.9% reflecting margin pressure and ongoing investment in digital banking • Income decreased 4%, with NIM of 3.05% Q218 Q318 Q418 Q119 Q219 Financial performance1 − Driven by pressure on retail margins reflecting increased refinancing activity by mortgage 1,836 1,896
Slide 8: Q219 Barclays International
Q219 Barclays International Diversified business delivered another quarter of double digit returns • Achieved RoTE of 10.8% Income balanced across Financial performance1 • Balanced and diversified business, with businesses and geographies Income US c.50% and UK c.30% of income3 £3.9bn Q218: £3.7bn •
Slide 9: Q219 Barclays International: Corporate & Investment Bank
Q219 Barclays International: Corporate & Investment Bank Robust performance reflecting focus on driving returns • RoTE of 9.3%, up from 9.1% in Q218, reflecting an Financial performance1 8% increase in income Income • Markets income increased 7% including a £166m GBP basis (£m) USD basis4 ($m) Incom
Slide 10: Q219 Barclays International: Consumer, Cards & Payments
Q219 Barclays International: Consumer, Cards & Payments RoTE of 18.0% with steady growth in US Cards and investments across CC&P businesses • RoTE of 18.0% as income decreased £19m Q218 Q318 Q418 Q119 Q219 Financial performance1 reflecting the non-recurrence YoY of a £53m gain from a portfolio sale
Slide 11: Head Office
Head Office Q218 Q119 Q219 33 • Q219 negative income included: – c.£90m impact from legacy capital Income1 (95) (136) instruments (predominantly the 14% (£m) RCI) funding costs per quarter – Following redemption of the 14% RCI, impact from legacy capital instruments is expected to reduce by (52) c.£
Slide 12: Expect to reduce costs below £13.6bn, given H1 income environment
Expect to reduce costs below £13.6bn, given H1 income environment Absolute cost reduction 2018 to 2019 (£bn)1 2019 cost flexibility • Given the challenging income environment experienced in H119, expect to reduce 2019 costs below £13.6bn2 (based on 1.27 USD FX rate) through: 13.9 – Further flexibili
Slide 13: TNAV progression
TNAV progression Continued growth in TNAV; accretion of 9p in the quarter TNAV (pence per share) 1 • TNAV grew to 275p in the 3 275 quarter 4 3 – 6p of earnings per share 6 – Partially offset by the 2018 full year dividend payment of 4p – 3p due to cash flow hedge and FVOCI reserve movements, reflec
Slide 14: CET1 ratio progression
CET1 ratio progression 13.4% with strong capital generation from profits CET1 ratio1 £0.6bn £43.6bn £0.7bn • CET1 ratio of 13.4%, due to: £0.4bn £0.2bn 22bps 13.7% 22bps £42.9bn – 38bps of profits generated in £1.2bn £0.2bn 5bps 6bps 11bps 13.4% the quarter £43.6bn – 11bps due to FVOCI reserve 38bps
Slide 15: Strong capital and leverage positions
Strong capital and leverage positions Well positioned on capital: above target CET1 ratio with manageable near term regulatory headwinds Continue to manage CET1 and leverage ratios to meet requirements Regulatory minimum level BoE stress test hurdle rate for 2018 test • We manage the Group’s capital
Slide 16: High quality funding position with a conservatively positioned liquidity pool and LDR
High quality funding position with a conservatively positioned liquidity pool and LDR Well prepared for Brexit and macroeconomic uncertainties Diversified funding profile with strong deposit base Well positioned for future MREL requirements 2% • Continue to expect 8% Deposits 30.2% c.£8bn of total M
Slide 17: Focused on profitability and returning capital to shareholders
Focused on profitability and returning capital to shareholders Q219 highlights Group targets CET1 ratio above target CET1 ratio2 Capital Returns 13.4% Policy reiterated: Dividends Progressive ordinary c.13% dividend, supplemented by Half year dividend share buybacks as of 3p declared and when approp
Slide 18: Appendix
Appendix
Slide 19: Diversified and prudently positioned
Diversified and prudently positioned Well prepared for Brexit and macroeconomic uncertainties Diversified income mix by geography and product Diversified funding 5% 2% 17% 8% 20% 9% 9% Group 9% Group Group 12% income by income by 50% funding business1 6% geography2 18% sources3 37% 63% 12% 16% 9% Pe
Slide 20: Evolving Group capital allocation
Evolving Group capital allocation c.60% of Group RWAs are allocated to lending activities to consumers and businesses Corporate loan book2 Consumer lending/payments3 • Improve client returns • Focus of investment spend and on lending c.30% c.30% growth • Add transaction banking and Group • Low capit
Slide 21: Think digital, think Barclays UK
Think digital, think Barclays UK Building meaningful relationships with our 24 million customers Changing the shape of our business Front end digitisation Strengthen customer Investing in digital talent, relationships through cyber resilience Automation digital transformation and digital technology
Slide 22: Barclays International: Improving share in the CIB
Barclays International: Improving share in the CIB Gaining share in Markets and Banking Markets1 Banking fees2 30bps 30bps 10bps XXX XXX XXX XX XX XX XX XXX 4.2% 4.5% 4.1% 4.4% 4.3% 4.4% Q118 Q119 FY18 H119 Q119 Q219 Overall 30bps gain of market share in Global Markets, driven by strong perfor
Slide 23: Barclays International: Consumer, Cards & Payments opportunities
Barclays International: Consumer, Cards & Payments opportunities Portfolio of leading franchises with high returns and growth potential Cards & Payments #9 US credit card receivables1 Barclays Strong market US position and Consumer delivering Bank growth $15.4bn Retail deposits #2 Merchant acquirer
Slide 24: Prudently managing credit risk in both the UK and US
Prudently managing credit risk in both the UK and US Conservatively positioned in the face of Brexit and the consumer credit cycle in the US Q218 Q318 Q418 Q119 Q219 £134.4bn £136.5bn £138.3bn • Focus on growing mortgage book within UK 67.1% conservative risk appetite 64.4% 65.4% UK mortgage • c.50%
Slide 25: Strong Group CET1 and leverage ratios
Strong Group CET1 and leverage ratios Fully loaded and transitional CET1 ratio Fully loaded CET1 ratio IFRS 9 transitional benefit • Transitional CET1 ratio increased from 13.0% to 13.4% in the quarter, reflecting: 13.3%1 13.2%1 13.0%1 13.4%1 12.4% – 38bps of organic capital generation from profits
Slide 26: Prudently managing the Group's capital position
Prudently managing the Group’s capital position Managing the Group CET1 ratio above the distribution restrictions minimum Q219 CET1 ratio1 13.4% Distribution restrictions c.13% target • Maintaining our CET1 ratio comfortably above the mandatory Mandatory Distribution Restrictions (MDR) hurdle Headro
Slide 27: Managing evolving future Group minimum leverage requirements
Managing evolving future Group minimum leverage requirements Minimum leverage requirements and buffers under the UK regime • We continue to view leverage as a backstop measure in Q219 UK leverage ratio determining the capital Barclays holds. Our business mix means the 5.1% risk based RWA measure of
Slide 28: High quality liquidity position
High quality liquidity position Conservatively positioned liquidity pool, LDR and lower reliance on short-term wholesale funding Highly liquid, comfortably exceeding minimum requirement Conservative loan: deposit ratio2 Loans and advances3 (£bn) Deposits3 (£bn) LDR Liquidity Coverage Ratio (LCR) 83%
Slide 29: Focus on ESG
Focus on ESG Growing momentum on key Environmental, Social and Governance factors across the firm Progress on key ESG factors Sustainability & Citizenship Commitments • Continued to build green and sustainable finance platform across Capital and Products business lines • Released Energy and Climate
Slide 30: Financial results tables
Financial results tables
Slide 31: Other items of interest – Q219 vs. prior year
Other items of interest – Q219 vs. prior year Material items (£m) Q219 Q218 Litigation and conduct Across divisions (53) (81) Group Other items of interest (£m) Income Strategic investment gain relating to the IPO of Tradeweb 166 Corporate & Investment Bank (Markets) Settlement of receivables relati
Slide 32: Q219 Group
Q219 Group Three months ended (£m) Jun-19 Jun-18 % change Excluding L&C – Three months ended (£m) Jun-19 Jun-18 % change Income 5,538 5,576 (1%) PBT 1,584 1,976 (20%) Impairment (480) (283) (70%) Attributable profit 1,074 1,338 (20%) – Operating costs (3,501) (3,310) (6%) – Litigation and conduct (5
Slide 33: Q219 Barclays UK
Q219 Barclays UK Business performance Excluding L&C – Three months ended (£m) Jun-19 Jun-18 % change Three months ended (£m) Jun-19 Jun-18 % change PBT 518 659 (21%) – Personal Banking 946 1,015 (7%) Attributable profit 358 474 (24%) – Barclaycard Consumer UK 497 504 (1%) Performance measures – Busi
Slide 34: Q219 Barclays International
Q219 Barclays International Business performance Excluding L&C – Three months ended (£m) Jun-19 Jun-18 % change Three months ended (£m) Jun-19 Jun-18 % change PBT 1,234 1,344 (8%) – CIB 2,795 2,580 8% Attributable profit 840 960 (13%) – CC&P 1,108 1,127 (2%) Performance measures Income 3,903 3,707 5
Slide 35: Q219 Barclays International: Corporate & Investment Bank and Consumer, Cards & Payments
Q219 Barclays International: Corporate & Investment Bank and Consumer, Cards & Payments CIB business performance CC&P business performance % change % change Three months ended (£m) Jun-19 Jun-18 Three months ended (£m) Jun-19 Jun-18 % change GBP basis USD basis – FICC 920 736 25% 20% Income 1,108 1,
Slide 36: Q219 Head Office
Q219 Head Office Head Office business performance Three months ended (£m) Jun-19 Jun-18 Income (136) 33 Impairment charges (3) (1) – Operating costs (44) (36) – Litigation and conduct (1) (31) Operating expenses (45) (67) Other net income/(expenses) 15 (23) LBT (169) (58) Performance measures (£bn)
Slide 37: Abbreviations
Abbreviations ABS Asset-backed Securities ECB European Central Bank P1 Pillar 1 ADI Available Distributable Items ECM Equity Capital Markets P2A Pillar 2A ALAC Additional Loss-Absorbing Capacity EMEA Europe, Middle East and Africa PBT Profit Before Tax AP Attributable Profit EPS Basic Earnings per S
Slide 38: Disclaimer
Disclaimer Important Notice The terms Barclays or Barclays Group refer to Barclays PLC together with its subsidiaries. The information, statements and opinions contained in this presentation do not constitute a public offer under any applicable legislation, an offer to sell or solicitation of any of